US President Donald Trump is threatening to shut down government again if he does not get funding for a border wall. AFP
US President Donald Trump is threatening to shut down government again if he does not get funding for a border wall. AFP
US President Donald Trump is threatening to shut down government again if he does not get funding for a border wall. AFP
US President Donald Trump is threatening to shut down government again if he does not get funding for a border wall. AFP

US government reopens but spectre of February 15 closure hangs heavy


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Parts of America's federal government reopened on Monday after the longest shutdown in US history, but the threat of another closure looms over Washington with President Donald Trump adamant that a wall will be built along the Mexican border.

The 35-day hiatus caused 800,000 federal workers to miss two salary payments and only ended when Mr Trump agreed to a short-term funding deal last week, having been forced to back down when his tactic of pushing Democrats toward more favourable negotiations with the White House failed.

The threat of a second shutdown, however, remains pressing. The interim agreement lasts only until February 15 and without a breakthrough over the $5.7 billion (Dh21bn) Mr Trump wants to pay for the wall the US could find itself back in the same position.

The president on Sunday sought to recover some of the ground he has lost after a week of sliding job approval ratings and criticism of his handling of the shutdown and the border wall row.

“After all that I have done for the Military, our great Veterans, Judges (99), Justices (2), Tax & Regulation Cuts, the Economy, Energy, Trade & MUCH MORE, does anybody really think I won’t build the WALL? Done more in first two years than any President! MAKE AMERICA GREAT AGAIN!” he tweeted.

Mr Trump's message followed a backlash from some of his normally biggest media admirers, including the Conservative columnist Ann Coulter who branded the president the “biggest wimp ever” for failing to secure wall funding.

The shutdown left workers unpaid but its effect of leaving millions of Americans angered by being unable to get access to basic government services appeared to force the president's climbdown. The prospect of airport safety being compromised, with many unpaid air traffic controllers refusing to turn up to work, seemed a watershed. LaGuardia Airport in New York closed temporarily on Friday. Hours later Mr Trump announced that he would sign off on a Congressional plan to end the shutdown, handing a public victory to Democrats and House Speaker Nancy Pelosi.

With Democrats now in control of the House of Representatives, Mrs Pelosi is aiming to pass a pay rise for all federal workers. Senate Republicans are pushing a Middle East bill that includes a plan to target the movement to boycott, divest from and sanction Israel. But it is the issue of the wall that will continue to make the running in Washington until the deadline for a new agreement to fund government expires in less than three weeks.

Mr Trump's room for manoeuvre appears only to have narrowed after last week but in an interview with The Wall Street Journal he raised the prospect of another standoff with Democrats.

“I personally think it's less than 50-50,” he said, referring to the likelihood of an agreement over wall funding being struck.

Such a stalemate increases the chances of Mr Trump attempting to bypass Congress and instead use executive powers granted under the presidency to get what he wants. That could include him declaring a national emergency over the border and immigration, which he repeatedly talked of doing during the shutdown but did not in the end follow through on.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Yahya Al Ghassani's bio

Date of birth: April 18, 1998

Playing position: Winger

Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda